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Morro Bay hikes up water rates 

After 20 years, four years of drought, and potentially unpayed debts, the city of Morro Bay finally hiked its water rates.

The Morro Bay City Council gave a unanimous final nod on May 25 to conclude the arduous process of raising water and sewer rates. The approval followed months of reveiw, including a February study session and the ensuing Proposition 218 process, a requirement that gives ratepayers an opportunity to protest new or increased fees.

City officials said the increases are necessary because the city wasn’t generating enough revenue to pay for current and future water and wastewater infrastructure and debt payments, including bond debts for its annual state water allocation. Leading up to the rate increase, the city’s enterprise fund was more than $900,000 in the red.

The council also raised sewer rates, which have been gradually increasing in recent years.

“The council’s decision to support the rate increases, to start the [Proposition] 218 process, is not because we wanted to, but because we feel that we must,” Councilmember Christine Johnson said, reading from what appeared to be a written statement during deliberations.

The city hasn’t raised rates in 20 years, so the real cost of water for city residents appears to have decreased by 36 percent because of inflation.

Berkeley-based consultant Bartle Wells Associates assessed the city’s infrastructure costs, use, and rate structure and recommended that the city adopt a tiered rate structure. The fixed monthly rate—currently $16.43—will increase to $23 a month in the 2015-2016 fiscal year and gradually increase to $32 by 2019-2020. The new rate structure also introduces a four-tiered rate structure that compounds charges as water use increases.

In addition, the city added a special surcharge for when the city’s brackish water desalination plant is operating, which would happen if the city doesn’t receive state water for a long period of time; and emergency rates during severe water shortages, which would only be applied if a stage IV or stage V emergency is declared (currently the city is in a stage III level of severity).

As required by Proposition 218, the city issued 8,931 notices to residents and businesses, covering the 5,412 parcels eligible to protest. The city received 933 written protests; far shy of the required number of protests to block the rate increases.

Before making the final decision, the council received an earful on the subject.

“I think that the City Council has kind of forgot that this is a retirement community,” Morro Bay resident Andrew Schwartz said during public comment. “And Social Security gave us last year a 1.7 percent increase.”

The city heard from about a dozen residents concerned with the rate increases, who cited issues of legality, how the notices read and were sent out, whether the notices were issued in Spanish, and how the increases would affect fixed-income residents. One resident spoke in favor of the rate hikes. Some discussion questioned the wisdom of decisions made by previous councils.

“It’s not about the past 20 years, it’s about where we’re going into the future, in the next 20 years,” Mayor Jamie Irons said. “This council is looking at the circumstance before us, and I think it’s a pretty clear picture.”

-- Melody DeMeritt - former city council member, Morro Bay

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